Regulatory Alerts2010-04-27
Instructions Concerning Rules and Regulations for Banks' Extension of Consumer Loans and Other Installment Loans
The Central Bank of Kuwait issues binding instructions that standardize how local banks extend consumer and installment loans by defining maximum lending limits, repayment periods, and interest rate ceilings. Financial institutions must verify loan purposes, validate borrowers' repayment sources via official salary certificates, restrict new lending to customers with pending legal actions, and cap total monthly installments at 40 percent of net income. The framework further mandates monthly regulatory reporting, restricts upfront interest deductions, and enforces compliance through mandatory external audits and centralized data management.
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